LGO warns on water rates after council overcharged tenants £38k
The Local Government Ombudsman has highlighted the importance of councils complying with the Water Resale Order, after a London borough was found to have overcharged 58 tenants by more than £38,000.
The LGO’s investigation was prompted by a complaint about a lack of meters in homes owned by Hammersmith & Fulham Council.
The complainant, who had lived in a sheltered housing complex since 2007, argued that the local authority had acted unreasonably when it charged her a compulsory water charge, rather than for just the water that she used.
The woman also said Hammersmith & Fulham had refused to provide individual meters despite requests from residents. She claimed Thames Water had backed the residents’ requests.
The complainant had complained to the council in April 2010 that rather than paying the Thames Water assessed household charge for an unmetered property of £175, she was paying a yearly charge of £332.80.
Hammersmith & Fulham said it had charged the woman for water use in accordance with its policy. However, during the LGO’s investigation, it realised that it had – in breach of the Water Resale Order – been charging residents more than it had paid Thames Water.
The local authority subsequently wrote to all affected tenants that they were owed money for overcharged water rates between 1 April 2008 and 31 March 2013.
The complainant has received £798.99 back and other tenants are now due a refund.
The Ombudsman has also recommended that Hammersmith & Fulham:
- pay interest on the amount overcharged;
- comply with the requirements of the Water Resale Order by clearly explaining to tenants how it has calculated their water rate when it issues a demand for payment;
- review how it collects water charges from its tenants;
- pay the complainant £100 for the time and trouble in bringing the complaint.
The LGO's investigation did not find fault with the water meter part of the complaint.
The Local Government Ombudsman, Dr Jane Martin said: “While I recognise that the council is now taking steps to rectify the situation and refund tenants, it has taken a complaint to me and a subsequent investigation for the council to act.
“This is an issue that should have been identified when the woman first questioned the council’s charging policy in 2010.”
Dr Martin added: “I hope that this report will highlight to other councils the importance of complying with the Water Resale Order by clearly explaining to tenants how it calculates their water rates when it demands payment.”
Cllr Andrew Johnson, Hammersmith & Fulham’s cabinet member for housing, said: "I can only sincerely apologise to the residents who have been overcharged for water and I want to reiterate that the council is absolutely committed to sorting this out so that everyone pays for the water they use.
"It is clear that the system for apportioning water bills for these homes, which we inherited from the now defunct ALMO, was not fit for purpose. Historically, overall we have been charging tenants less for water than the council is charged by Thames Water with some people paying too much and some people paying too little.”
Cllr Johnson said: "I have instructed the housing department to undertake a thorough review of what went wrong to make sure that this never happens again and ensure that everyone receives an accurate bill. While we have, of-course, reimbursed those people in Meadowbank Close who have been overcharged, some tenants' bills may now go up next year as a result of the Ombudsman's ruling."
The LGO no longer investigates housing managements complaints. Since 2013, this role has fallen to the Housing Ombudsman.